Post Katrina and the cost of Insurance
09-07-2005 | 05:47 PM
#1
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Post Katrina and the cost of Insurance
I have heard that after all the hurricanes in Florida last year, several MAJOR insurance companies heavily restricted the number of policies that could be written here.
Instead it seems, the insurance companies went and wrote lots of policies in the area affected by Katrina and are now feeling the consequences. I wonder if any will fail?
Anyone into insurance?
fltsfshr
Instead it seems, the insurance companies went and wrote lots of policies in the area affected by Katrina and are now feeling the consequences. I wonder if any will fail?
Anyone into insurance?
fltsfshr
09-07-2005 | 06:04 PM
#2
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From: York
I heard an NPR interview this a.m. The claims adjuster was saying that things look pretty grim for many policy holders hit in the Gulf.
The problem is in specific wording that goes (roughly) like this:
If the house damage is from water coming through the roof, you will get help. However, if the damage is from water coming through vents, windows or doors, you may not have coverage.
That fine print can do as much damage as a natural catastrophe.
The problem is in specific wording that goes (roughly) like this:
If the house damage is from water coming through the roof, you will get help. However, if the damage is from water coming through vents, windows or doors, you may not have coverage.
That fine print can do as much damage as a natural catastrophe.
09-07-2005 | 06:48 PM
#3
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From: EstesPark/BocaRaton
I'm in the process of obtaining homeowner's insurance for a house in Florida, something I have no real experience with.
But I'm finding out that it's different down there.
First, no one would write policies today, because (what is now) Tropical Storm Ophelia is lurking off the coast. When there's a storm around, they suspend new policies -- for good reason, after all: just like getting new health insurance with a pre-existing condition is generally impossible, getting homeowner's insurance when there's a clear and present danger is just not something underwriters will go for.
Second, there's a clear distinction between regular coverage and flood insurance. Water coming in that's not clearly associated with wind damage (wind blows off a roof or breaks a window) is usually classified as a flood problem, and if you don't have (the special Federally subsidized) flood insurance, you're SOL.
Clearly, most of the damage associated with Katrina will classify as flood damage (both the storm surge damage in Mississippi and Alabama and the destruction of New Orleans). Whether this will cause regular rates (from commercial companies) to rise is an interesting question. HPH
But I'm finding out that it's different down there.
First, no one would write policies today, because (what is now) Tropical Storm Ophelia is lurking off the coast. When there's a storm around, they suspend new policies -- for good reason, after all: just like getting new health insurance with a pre-existing condition is generally impossible, getting homeowner's insurance when there's a clear and present danger is just not something underwriters will go for.
Second, there's a clear distinction between regular coverage and flood insurance. Water coming in that's not clearly associated with wind damage (wind blows off a roof or breaks a window) is usually classified as a flood problem, and if you don't have (the special Federally subsidized) flood insurance, you're SOL.
Clearly, most of the damage associated with Katrina will classify as flood damage (both the storm surge damage in Mississippi and Alabama and the destruction of New Orleans). Whether this will cause regular rates (from commercial companies) to rise is an interesting question. HPH
09-07-2005 | 08:08 PM
#4
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From: Houston, TX
I just got a few quotes for Auto and Home Insurance this week. Most quotes I got for home insurance were stable around what I am paying right now, but I got one that was actually half of what I am paying right now (and auto was cheaper, too, so I guess I'll switch). So at least for Texas I guess there is not much effect (yet).
09-08-2005 | 05:37 AM
#5
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From: Flagler Beach, FL
In Florida during hurricane season most companies will not write new policies. If they do they are extremely high. My home owners police jumped $200 and my flood insurance went up $150 after the storms last fall. I have not filed a claim in the 14 yrs that I have owned this house. Between the two I pay close to $1,500 a year, with the chance that it can be canelled at the wim of the insurance company. There were over 15,000 people that had their insurance cancelled by Allstate last year because of the 3 hurricanes.
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09-08-2005 | 08:58 AM
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Flood insurance is always available MsPerky. It's underwritten by the federal gov't so everyone does have access to it regardless or where they live.
The trick is you have to pay for it. It's not free. Rates are based upon elevation to the flood plain you're in.
Many people unfortunately don't don't buy it and take their chances. The problem is now who pays for those who didn't?
It's required by most lending institutions if you are within the flood plain. Here the cutoff is 12ft. Then you can still buy it if you want, I carry it although I'm above the 12' elevation. Here the rate is based in 3 tiers. under 5' , 5' to 12' and over 12' above sealevel.
Wind is another issue that I think will be eventually addressed by the same type of insurance pool. In Florida now, your wind rider is much more. Prior to Andrew, wind was inclusive in your homeowners policy.
fltsfshr
The trick is you have to pay for it. It's not free. Rates are based upon elevation to the flood plain you're in.
Many people unfortunately don't don't buy it and take their chances. The problem is now who pays for those who didn't?
It's required by most lending institutions if you are within the flood plain. Here the cutoff is 12ft. Then you can still buy it if you want, I carry it although I'm above the 12' elevation. Here the rate is based in 3 tiers. under 5' , 5' to 12' and over 12' above sealevel.
Wind is another issue that I think will be eventually addressed by the same type of insurance pool. In Florida now, your wind rider is much more. Prior to Andrew, wind was inclusive in your homeowners policy.
fltsfshr
09-08-2005 | 10:12 AM
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From: Houston, TX
From today's newspaper:
Source: Houston Chronicle
Sept. 8, 2005, 12:03AM
Louisiana proposes limits on insurance cancellations
Order would make it harder to cut off policies of storm victims
By HARRY R. WEBER
Associated Press
ATLANTA - A draft order released by Louisiana's insurance commissioner Wednesday would significantly restrict the ability of property and health insurance companies to cancel the policies of Hurricane Katrina victims in that state.
The order, which is not expected to be complete until late next week as to allow insurers time to respond, says policy provisions that require premium payments will be suspended retroactive to Aug. 26, when Louisiana declared a state of emergency.
It also says that any cancellation notice issued after Aug. 26 for a policy that was in effect on that day will be void. The order says the notices should be reissued once the state of emergency is lifted. Currently, that would be Sept. 25, but the date could be extended.
The draft order was presented at an emergency summit of insurance commissioners from the hurricane-damaged Gulf Coast states and nearly 300 insurance company officials who write policies in their states.
Economic impact
The officials gathered at an Atlanta airport hotel to discuss how to deal with an expected deluge of insurance claims related to Katrina. Louisiana Insurance Commissioner J. Robert Wooley estimated the insured losses in his state alone at $19 billion. The Florida insurance commissioner estimated the total economic impact from the hurricane at up to $150 billion.
"You, as an industry at this point in time, will need to be a leader, and you will be judged by how you respond," Alabama Insurance Commissioner Walter Bell said at the meeting.
Bell told the group they should relax their regulations related to flood insurance. He noted that many residents in Mobile whose homes were destroyed by flooding were not in a designated flood plain and therefore may not have had flood insurance.
"People in this room have an incredible opportunity to be a very proactive force in the recovery of this area, because that's the next phase," Wooley told the group. "We need your help. I think this industry is going to be watched, just like the rescue effort was watched."
Wooley was referring to criticism that the federal government did not move quickly enough to help evacuate people from hurricane-ravaged New Orleans. On that point, however, Wooley said the criticism was unfair.
"I am appalled at the finger-pointing that is going on in the national media about what has happened," he said. "You know what? It's easy to win the Super Bowl on Monday, but when you're in the game, things move at a different speed."
Health policies, too
Besides property damage, the Louisiana insurance commissioner's order also would place restrictions on health insurance companies who do business in seven Louisiana parishes affected by the hurricane. The parishes are Jefferson, Orleans, Plaquemines, St. Bernard, St. Tammany, Tangipahoa and Washington.
Specifically, the draft order says all cancellation and termination provisions are suspended during the state of emergency.
It also says that all insurers with policyholders in the seven parishes shall waive any restrictions relative to out-of-network access to health care services, and that all health insurance issuers shall reimburse at the highest possible rate to minimize people's out-of-pocket expenses.
The order related to property insurance companies and health insurance companies also would put in place provisions designed to speed up the claims process.
Louisiana proposes limits on insurance cancellations
Order would make it harder to cut off policies of storm victims
By HARRY R. WEBER
Associated Press
ATLANTA - A draft order released by Louisiana's insurance commissioner Wednesday would significantly restrict the ability of property and health insurance companies to cancel the policies of Hurricane Katrina victims in that state.
The order, which is not expected to be complete until late next week as to allow insurers time to respond, says policy provisions that require premium payments will be suspended retroactive to Aug. 26, when Louisiana declared a state of emergency.
It also says that any cancellation notice issued after Aug. 26 for a policy that was in effect on that day will be void. The order says the notices should be reissued once the state of emergency is lifted. Currently, that would be Sept. 25, but the date could be extended.
The draft order was presented at an emergency summit of insurance commissioners from the hurricane-damaged Gulf Coast states and nearly 300 insurance company officials who write policies in their states.
Economic impact
The officials gathered at an Atlanta airport hotel to discuss how to deal with an expected deluge of insurance claims related to Katrina. Louisiana Insurance Commissioner J. Robert Wooley estimated the insured losses in his state alone at $19 billion. The Florida insurance commissioner estimated the total economic impact from the hurricane at up to $150 billion.
"You, as an industry at this point in time, will need to be a leader, and you will be judged by how you respond," Alabama Insurance Commissioner Walter Bell said at the meeting.
Bell told the group they should relax their regulations related to flood insurance. He noted that many residents in Mobile whose homes were destroyed by flooding were not in a designated flood plain and therefore may not have had flood insurance.
"People in this room have an incredible opportunity to be a very proactive force in the recovery of this area, because that's the next phase," Wooley told the group. "We need your help. I think this industry is going to be watched, just like the rescue effort was watched."
Wooley was referring to criticism that the federal government did not move quickly enough to help evacuate people from hurricane-ravaged New Orleans. On that point, however, Wooley said the criticism was unfair.
"I am appalled at the finger-pointing that is going on in the national media about what has happened," he said. "You know what? It's easy to win the Super Bowl on Monday, but when you're in the game, things move at a different speed."
Health policies, too
Besides property damage, the Louisiana insurance commissioner's order also would place restrictions on health insurance companies who do business in seven Louisiana parishes affected by the hurricane. The parishes are Jefferson, Orleans, Plaquemines, St. Bernard, St. Tammany, Tangipahoa and Washington.
Specifically, the draft order says all cancellation and termination provisions are suspended during the state of emergency.
It also says that all insurers with policyholders in the seven parishes shall waive any restrictions relative to out-of-network access to health care services, and that all health insurance issuers shall reimburse at the highest possible rate to minimize people's out-of-pocket expenses.
The order related to property insurance companies and health insurance companies also would put in place provisions designed to speed up the claims process.
